[canfinishthis2013]

As S corp, why should LTCG be included in the AAA?

FAR PASSED Feb 28, 2013
AUD Oct 27,2013
REG Jan 7,2014
BEC Nov 15,2013

[mrwills12]

Because LTCG are ultimately taxable to the shareholder. income that is taxed increases AAA conversely and loses (taken by the shareholder) reduce AAA. Same goes with stock basis. Each shareholder has to keep track of their own AAA account for S corp and partnerships. Meaning that 2 shareholders could have different AAA accounts and have the same % owned.

FAR - 88 (Jul 2012)
AUD - 85 (Oct 2012)
BEC - 82 (Nov 2012)
REG - 92 (Jan 2013) DONE!

Using Becker Self Study 2012

[JoeL]

in my opinion, E&P and AAA are similar to Book Income under GAAP, some incomes are not taxable, but it is distributable, E&P and AAA will include all taxable and nontaxable income, because it is earned, does not matter it is taxable or not.

[Noct]

AAA and basis are not the same thing. Two shareholders with equal ownership over the same time frame will have equal AAA accounts because both allocated earnings and distributions must be in proportion to ownership. However, basis may be very different because a shareholder can get basis for loans to the company.

FAR - 79 - 07/2012
AUD - 65, 78 - 11/2012
BEC - 76 - 11/2012
REG - 78 - 01/2013
ETH - 98 - 01/2013

Material: Wiley books

[Author]

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